When you think that the real estate landscape can’t have another surprise for you, a new report comes out to rain on your parade. For real estate agents new data can bring a mixed message for their business.
In a recent report from RealtyTrac report, loan originations have dropped by 30 percent in the first quarter of the year when compared to the last quarter of 2016. Moreover, originations were off from a total purchase dollar volume standpoint, for total refinance dollar volume and for home equity lines of credit, according to the report.
A report from ATTOM Data Solutions showed similar results, with more than 1.4 million loans were originated in the first quarter of 2017, down 30 percent compared to the fourth quarter of 2016 and down 21 percent from a year ago.
Overall, ATTOM Data Solutions found that total dollar volume of loan originations in the first quarter was $347.9 billion, down 21 percent year-over-year and the lowest since the first quarter of 2014, the report found.
“Rising mortgage rates made qualifying for a home purchase more difficult and refinancing an existing home loan less attractive in the first quarter,” ATTOM Data Solutions Senior Vice President Daren Blomquist said in a statement.
A total of 12 metropolitan areas had year-over-year increases in purchase originations in the first quarter of this year. They included Hartford, Conn. (up 4 percent); Richmond, Va. (up 4 percent); Los Angeles (up 4 percent); Memphis, Tenn. (up 3 percent); and Tucson, Ariz. (up 1 percent).
However, Blomquist pointed out that there is a silver lining to some of the current market trends, which should be music to the ears of real estate agents.
“Despite the sharp drop in purchase originations, there were some encouraging signs in the data that a larger share of first-time homebuyers participated in the housing market in the first quarter: the share of FHA buyers increased from the previous quarter after two consecutive quarters down, and the median downpayment decreased following three consecutive quarters of increases,” he said.
However, more clients are requiring assistance to qualify for financing for the home purchase. According to the ATTOM report, about 22 percent of all single family purchase originations had multiple, non-married co-borrowers on the loan, up from 20 percent a year ago.
The report also found that refinances for the quarter (675,899) had declined 36 percent from the fourth quarter of last year and 22 percent from the same period last year. Only five of the 98 metro areas analyzed in the report posted year-over-year increases in refinance originations in Q1 2017: Kansas City (up 41 percent); Lexington, Kentucky (up 17 percent); Memphis, Tennessee (up 12 percent); Greenville, South Carolina (up 2 percent); and Atlanta, Georgia (up 2 percent). efinance volume was $167.9 billion, down 39 percent from the previous quarter and down 26 percent from a year ago.
For agents, the time it takes to get the deal closed is shrinking.
Jonathan Corr, president and CEO of Ellie Mae, said the time to close loans shrink for the third consecutive month to 42 days, a substantial decrease from the 2017 high of 51 days in January.
“Ellie Mae customers are realizing efficiencies as they embrace technology to improve the homebuying experience,” said Corr.
